ANTI-MONEY LAUNDERING LOOPHOLE ALLOWS DISSIPATION OF FUNDS

MANILA, September 3, 2003  (STAR) By Des Ferriols  - The loophole in the Anti-Money Laundering Act (AMLA) is allowing the dissipation of funds in spurious bank accounts, and the Anti-Money Laundering Council (AMLC) is powerless to prevent such funds from being spirited away.

Addressing the loophole would require another act of Congress but AMLC chairman and Bangko Sentral ng Pilipinas Governor Rafael Buenaventura said there was no push to undertake this change, especially while the country is under evaluation by the Paris-based Financial Action Task Force (FATF) on money laundering.

Buenaventura explained that when the AMLA was amended by Congress in March this year, the power to quietly freeze questionable bank accounts was removed from the AMLC and transferred to the regular courts.

Under the original version of the AMLA, the council itself had the authority to freeze accounts even without a court order, allowing the AMLC to prevent funds from dissipating and making it more probable to recover the deposited amount after the investigation and litigation have been concluded.

"But this power was removed from the AMLC so now, we can only freeze bank accounts after we have secured the necessary court order," Buenaventura explained. "The downside of this is that once we file a petition for a court order, the case becomes a matter of public record."

Buenaventura said that once the petition is filed, the owner of the account under investigation is then warned that his or her account was being investigated. "Once they find out before we can act, they can immediately pull their money out and so it goes," he said.

The original AMLA, Buenaventura said, allowed the council to quietly investigate suspicious bank accounts in full confidentiality. "No one need know about itĖif we decide to freeze, it would have been between the AMLC, the bank and the account owner," he explained.

"Once the investigation is over, if the AMLC decides that there is no case, then the case is concluded quietly and the account could be unfrozen,"Buenaventura said further. "The matter only becomes public when the AMLC decides that there is a case and charges are filed before the courts."

Despite this weakness in the law, however, Buenaventura said the AMLC is not pushing for any legislative action, saying that it would be up to Congress if it wanted to address the issue of dissipation of funds from suspicious bank accounts.

"Right now we are under FATF evaluation, we donít want to rock the boat," Buenaventura said. "At this point, we are fully compliant with all FATF provisions which donít require the AMLC to have the power to freeze bank accounts."

To date, the Supreme Court has extended the freeze order on some P1.08 billion worth of frozen assets involved in various money-laundering cases being investigated by the AMLC.

Prompted by the warnings of the AMLC, the High Tribunal granted the urgent motions filed by the Office of the Solicitor General for extension of the freeze orders in 29 separate cases before the transitory provision of the new Anti Money Laundering Act took effect.


Reported by: Sol Jose Vanzi

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